--- the subscriber area has no ads and those above are not selected or endorsed by this site ---


Xebec 1Q22 results -3

09:31 12-May-22


The Xebec conference call has just concluded and the main note for me is that management anticipates tapping equity markets.  In a market sense, that negates some of the positive factors I noted below and means that lows could persist beyond the current equity crunch that I foresaw through next week.  Management will also be tapping financing, and I've noted the positive aspect of government support in that context.  However, until the terms of dilution, which could be equity investment from a larger partner, are known, all bets are off regarding near term stock pricing.

That is likely to precede other positive factors, with up to 12 more months for Quebec RNG initiatives to materialize.  The CarbonQuest initiative should also be proceeding over the next year or so as NYC law limits building emissions starting in 2024 and progressing through 2029.  Other cities are considering similar actions.

On 5/12/22 09:02, Esekla wrote:
Xebec has announced its first quarter results:
  • a loss of 12 Canadian cents per share misses by 8 cents
  • from CAD41.2M of revenue, which misses by CAD2.5M
Supply chain problems are hitting the company, but this morning's PPI numbers at least indicate stabilization.  Much of the impact here is also the legacy business and integration costs.  The former should continue throughout 2022, and sees no CapEx risk.  CAD2.6M of the CAD9.0M EBITDA loss is from finalization of such product sales.  As of yesterday, backlog almost tripled YoY.

The conference call is underway and I am listening, but management has consistently referenced its 3-year plan, and I continue to think value won't be fully realized here until 2024.  That said, current pricing could easily be a low with he rebate rate is at 58%.